Office Rental Segment Remains a Bright Spot
The Ho Chi Minh City office rental market experienced a strong recovery in Q4 2022, according to a report from Colliers International. In this context, the city stood out with most Grade A buildings maintaining an occupancy rate above 90%, and some even reaching 100% throughout 2022. Rental prices in this segment ranged from $41-67 USD/sqm/month, showing an increase of approximately 3% from the previous quarter.
Office Rental Segment Remains a Bright Spot
Grade B segment, while less volatile, witnessed some projects increasing rental and service fees, equivalent to the Grade A segment. The average rent for Grade B is $35 USD/sqm/month, with a vacancy rate of around 18%. The central adjacent areas of Ho Chi Minh City continue to attract significant attention from tenants, benefitting from competitive rental prices and improving connectivity to the city center.
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Supply in Ho Chi Minh City and Hanoi Rental Market
In terms of supply, Ho Chi Minh City added an additional 14,800 sqm from a project in Tan Phu district in Q4 2022. Moreover, the central region is expected to be supplemented with over 114,000 sqm of Grade A office space from projects set to be completed in 2023 and 2024.
In Hanoi, Grade A buildings in the city center maintained an occupancy rate of 87%, while Grade B had a vacancy rate of about 12%. The highest rent for Grade A remained below $50 USD/sqm/month, while the average rent for Grade B remained at $26 USD/sqm/month. The supply in Q4 2022 in Hanoi added an additional 28,000 sqm of Grade B office space from a project in Dong Da district.
Colliers forecasts that in 2022, the office real estate market has seen a recovery in both the number of projects put into operation and the occupancy rate. This is explained by the proactive renovation of existing projects, creating flexible office spaces to meet the diverse needs of the market.
GDP Contribution from Office Rental Sector
Additionally, with a projected GDP growth of 8.02% in 2022, Vietnam is highly rated compared to other countries in the region, attracting substantial new investments from abroad. This has led to an increased demand for office space, and office real estate is considered a potential segment for investors in 2023.
Although the average rent is expected to increase by about 2-3%, the projected occupancy rate is expected to maintain above 90%. Improvements in infrastructure and affordable rental prices make central adjacent areas increasingly attractive to both tenants and investors. Therefore, the office rental segment continues to maintain its appeal in the context of the volatile global economy.
Read more: Office for lease in Ho Chi Minh City
